The ATO has significantly increased its use of prosecutions to combat non-lodgment shadow economy activity.
The Australian Taxation Office (ATO) has today announced an 80% jump in non-lodgment prosecutions over the past 2 years from dodgy shadow economy operators, leading to more than $2.7 million in fines.
ATO Assistant Commissioner Tony Goding said operating in the shadows to avoid tax and super obligations might seem like a victimless crime, but it comes at a cost to the community.
The shadow economy refers to people or businesses doing the wrong thing, whether that’s not paying the tax or super they’re supposed to, demanding cash payment for work or workers missing out on their entitlements.
‘The shadow economy undermines legitimate businesses and reduces revenue that would otherwise fund essential public services that support all Australians. It doesn’t matter what profession you’re in, if you’re a tradie, hairdresser or café owner, and you deliberately avoid paying the right amount of tax, you risk more than financial penalties.’
‘A criminal conviction can have significant impact on your reputation, business viability and ability to travel overseas, as well as make it harder to borrow money or obtain insurance,’ said ATO Assistant Commissioner Tony Goding.
Prosecutions and convictions data
Lodging tax returns is a legal obligation, not a choice. The ATO has significantly increased its use of prosecutions to combat non-lodgment shadow economy activity, with successful prosecutions increasing by more than 80% between 2024–25 and 2025–26.
Over the past 2 years, the ATO has:
- successfully prosecuted more than 350 individuals and entities
- secured convictions of more than 305 individuals and entities, seeing an almost 60% increase between 2024–25 and 2025–26
- taken action leading to more than $2.7 million in fines imposed by the Courts.
In 2025–26, shadow economy activity in Queensland, New South Wales and Western Australia accounted for almost 75% of all successful non-lodgment prosecutions nationwide:
- Queensland – 28%
- Western Australia – 26%
- New South Wales– 20%
- Victoria – 17%
- South Australia – 7%
- Northern Territory – 2%
- Australian Capital Territory – 1%
‘The increasing number of convictions demonstrates that people who choose to break the rules are being caught and held accountable.’
‘What might start as a shortcut can quickly become a dead end, with serious financial, professional and personal consequences. Behind every conviction is a real person facing real costs from their choices, and behind every tax avoidance is money diverted from community services Australians rely on every day.
‘People who deliberately break the law risk their reputation and future, and the impact of a criminal conviction extends beyond the courtroom.
‘The cost of deliberately not lodging isn’t measured in fines alone. We’ve seen business owners receive criminal convictions, lose the trust of their customers and community, and in some cases, lose the very business they were trying to keep afloat. For more serious offending, time in prison is even a possibility.
‘Our message to the community is clear: deliberately ignoring your obligations comes at a significant cost,’ said Assistant Commissioner Tony Goding.
Notes for journalists
- A high-resolution headshot of ATO Assistant Commissioner Tony Goding is available from the ATO media centre.
- Media grabs of ATO Assistant Commissioner Tony Goding discussing the shadow economy are available from the ATO media centre.
- ATO stock footage and images are available for use in news bulletins from our media centre.
Contact details:
[email protected] | 02 6216 1901